UBS has reiterated its buy rating on London Stock Exchange Group PLC (LSE:LSEG), arguing the shares have become too cheap to ignore after a sharp recent decline.
Michael Werner, an analyst at the Swiss bank, kept a price target of 11,700p, implying upside of around 35%.
LSEG, the exchange and financial data operator, has seen its shares fall 13% over the past month.
The stock's forward price-to-earnings multiple hit a 14-year low a fortnight ago, at one point dropping below that of Euronext, the pan-European exchange group, for the first time since the latter listed 12 years ago.
The bank expects LSEG to post annual earnings growth of about 14% to 15% through 2028.
That puts the shares on one of their lowest ever valuations relative to that growth rate.
Werner said the market appeared to be assigning almost no value to the company's data and analytics division.
A sum-of-the-parts analysis implied the market was pricing that business at under £1 billion, he said.
The bank acknowledged the risk that artificial intelligence could disrupt the division, but said the threat was concentrated in the desktop and workflows unit, which accounts for around half of its revenues.
Any damage would ultimately be offset by income from the company's MCP server, a system that lets AI models connect to its data, Werner said.
The bank expects messaging around that product to drive the market's reaction to first-half results.
It believes the company has begun generating revenue from the server with some smaller clients, though it does not expect wider take-up until early 2027.
Greater clarity on pricing and the revenue opportunity would likely be rewarded by investors.
The bank forecasts earnings 1%, 3% and 5% above consensus for 2026, 2027 and 2028 respectively.
It named Euronext as its top pick among European exchanges.
